Q4 2023 NextNav Inc Earnings Call
Operator: www.nextnav.com Ladies and gentlemen, this is the operator. Today's conference is scheduled to begin momentarily. Until that time, your lines will again be placed on music hold. Thank you for your patience. Please wait. The conference will begin shortly.
Ladies and gentlemen, this is the operator today's conference is scheduled to begin momentarily until that time your lines again will be placed on music hold thank you for your patience.
Please wait the conference will begin shortly.
[music].
Operator: The conference will begin shortly. Good afternoon. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to Nextnav's fourth quarter and full year 2023 earnings conference call. All lines have been placed on mute to prevent any background noise.
Good afternoon, My name is Krista and I'll be your conference operator today at this time I would like to welcome everyone to next NAV fourth quarter and full year 2023 earnings conference call. All lines have been placed on mute to prevent any background noise.
Operator: After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during that time, simply press star followed by the number one on your telephone keypad. And if you'd like to withdraw your question, again, press star one.
After the Speakers' remarks, there will be a question and answer session. If you'd like to ask a question during that time simply press star followed by the number one on your telephone keypad and if you'd like to withdraw your question again press Star one.
Erica Bartsch: Thank you. I would now like to turn the conference over to Erica Bartsch. Erica, you may begin your conference. Good afternoon, everyone, and welcome to Nextnav's fourth quarter and full year 2023 Results and Earnings Conference Call. Participating on today's call are Mariam Sarand, Nextnav's CEO, Gary Parsons, Nextnav's Chairman, and Chris Gates, Nextnav's Chief Financial Officer. Before we begin, please note that during today's presentation, the company may make forward-looking statements either in our prepared remarks or in the associated question and answer session.
I would now like to turn the conference over to Erica Barks Erika you may begin your conference.
Good afternoon, everyone and welcome to next labs fourth quarter and full year 2023 results earnings conference call participating on today's call are Mary M surround <unk> CEO, Gary Parsons next chairman and Christine <unk> Chief Financial Officer.
Before we begin please note that during today's presentation. The company may make forward looking statements either in our prepared remarks or in the associated question and answer session. In particular such forward. Looking statements may include statements about next nabs business plans objectives expectations and intentions to drive.
Erica Bartsch: In particular, such forward-looking statements may include statements about Nextnav's business plans, objectives, expectations, and intentions to drive growth in its 3D geolocation businesses and expansion of its next-generation GPS platform to maximize the value of its IP portfolio and spectrum, its international business, as well as its partnerships and the potential success thereof. Nextnav's estimated and future business strategies, competitive position, industry environment, and other potential growth opportunities. These statements are based on current expectations or beliefs; however, such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions, and other important factors, many of which are outside of Nextnav's control, that could cause actual results to differ materially from those discussed in the forward-looking statements. These statements may relate to, but are not limited to, expectations regarding Nextnav's strategies and future financial performance, including future business plans or objectives. The expected functionality of our geolocation services.
And it's three D geolocation businesses and expansion of its next generation GPS platform to maximize the value of its IP portfolio and spectrum its international business as well as next announced partnerships and the potential success thereof.
Estimated unchanged your business strategy competitive position industry environment and other potential growth opportunities.
These statements are based on current expectations or beliefs. However, such forward looking statements are subject to known and unknown risks uncertainties assumptions and other important factors many of which are outside of <unk> control that could cause actual results to differ materially from the results discussed in the forward looking.
Statements.
These statements may relate to but are not limited to expectations regarding our strategies and future financial performance, including future business plans or objectives.
The expected functionality of our geolocation services anticipated timing and level of deployment of our services anticipated demand and acceptance of our services perspective performance in commercial opportunities and competitors the timing of obtaining regulatory approvals commercial partnership acquisition and retention.
Erica Bartsch: Anticipated timing and level of deployment of our services. Anticipated demand and acceptance of our services. Prospective performance and commercial opportunities and competitors; the timing of obtaining regulatory approvals, commercial partnership acquisition and retention, products and services, pricing, market plans, and our ability to realize the anticipated technical and business benefits associated with acquisitions and any subsequent mergers, acquisitions, or other transactions; factors relating to our future operations. Projected capital resources and financial positions, estimated revenue and losses, projected costs and capital expenditures, and expectations about international markets, projections of market growth and size, including the level of market acceptance for our services, our ability to adequately protect key intellectual property rights or proprietary technology, our ability to maintain our location and monitoring service licenses and obtain additional LMS licenses as necessary.
Engine products and services pricing markets plans, and our ability to realize the anticipated technical and business benefits associated with acquisitions and any subsequent mergers acquisitions or other transactions.
Relating to our future operations projected capital resources, and financial position estimated revenue and losses projected cost and capital expenditures and expectations about international market projections of market growth in size, including the level of market acceptance for our services our ability to adequately protect.
Key intellectual property rights or proprietary technology, our ability to maintain our location and monitoring service licenses and obtain additional LMS licenses as necessary.
Erica Bartsch: Our ability to maintain adequate operational financial resources, including for research and development, or raise additional capital or generate sufficient cash flows. Our ability to develop and maintain effective internal controls. Our success in recruiting and or retaining officers, key employees, or directors, expansion plans and opportunities, costs related to the public company, our ability to maintain the listing of our securities on NASDAQ, macroeconomic factors and their effects on our operations, and the outcome of any known and unknown litigation and regulatory proceedings, as well as assumptions relating to the foregoing. Accordingly, forward-looking statements should not be relied upon as representing our views of any subsequent date, and we do not undertake any obligation to update or revise any forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities laws.
Our ability to maintain adequate operational financial resources, including for research and development or raise additional capital or generate sufficient cash flows our ability.
<unk> to develop and maintain effective internal controls our success in recruiting and retaining officers.
Key employees are directors expansion plans and opportunity costs related to being a public company our ability to maintain the listing of our securities on nasdaq's macroeconomic factors and their effects on our operations and the outcome of any known and unknown litigation and regulatory proceedings as well as assumptions relating to the foregoing.
Accordingly forward looking statements should not be relied upon as representing our views of any subsequent date and we do not undertake any obligation to update or revise any forward looking statements to reflect events or circumstances. After the date. They were made whether as a result of new information future events or otherwise except.
As may be required under applicable securities laws.
Erica Bartsch: Following our prepared remarks, the company will host an operator-led question and answer session. In addition, at the conclusion of today's call, a replay of our discussion will be posted to the company's investor relations website. With that, I'll turn the call over to Nextnav's chairman, Gary Parsons. Please go ahead.
Following our prepared remarks, the company will host an operator led question and answer session. In addition at the conclusion of today's call a replay of our discussion will be posted to the company's investor relations website with that I'll turn the call over to <unk> Chairman Gerry Parsons. Please go ahead.
Gary M. Parsons: Well, thanks very much, and good afternoon, everyone, and welcome to Nextnav's fourth quarter and full year 2023 earnings call. Joining me on today's call are Marion Sorong, Nextnav's Chief Executive Officer, and Chris Gates, Nextnav's Executive Vice President and CFO. Now, 2023 promises to be a year of major progress for Nextnav.
Well, thank you very much and good afternoon, everyone and welcome to the <unk> fourth quarter and full year 2023 earnings call.
Joining me on today's call are <unk>, Chief Executive Officer, and Christi next tabs executive Vice President and CFO.
No 2023 proved to be a year of major progress the next now.
Gary M. Parsons: We furthered our position, navigation, and timing, or P&T technology, increased our financial flexibility with $70 million in additional funding, providing a multi-year liquidity profile. We expanded our wireless carrier and handset customer base for E911 3D location and first responder situational awareness, and landed P&T contracts with government agencies and Tier 1 chipset manufacturers. And most significantly, from my viewpoint, we recruited an extraordinary chief executive officer to lead us to the next stage of Nextnav's evolution. As you know, Merriam brings over three decades of technology, spectrum, and product leadership across wireless, wireline, satellite, and cloud companies. She is renowned for her technical and regulatory expertise and has hit the ground running during her first 100 days at the helm. So now, I turn it over to Mariam to introduce herself, tell you what attracted her to this opportunity, and give you a preview of her vision for Nextnav's technology, products, and spectrum assets. Mariam?
We furthered our position navigation and timing or Pnp technology.
Increased our financial flexibility with $70 million and additional funding, providing a multi year liquidity profile.
Standard, our wireless carriers and handset customer base or <unk>, three D location and first responder situational awareness.
Blended P&C contracts with government agencies and tier one chipset manufacturers.
Most significantly from my viewpoint, we recruited an extraordinary chief Executive officer to lead us to the next stage of VIX SaaS evolution.
As you know Mario brings over three decades of technology spectrum and product leadership across wireless wireline satellite and cloud company.
He is we're now for technical and regulatory expertise and has hit the ground running during her first 100 days of the Hill. So now let me turn it over to Maryann to introduce yourself, Tony what attracted her to this opportunity.
You a preview of her vision for next NAV technology products and spectrum assets Mary.
Mariam Sarand: Thank you, Gary, and good afternoon, everyone. It is a pleasure to be on my first earnings call as the CEO of Nextnav. Having the chance to take over the reins of the company is truly an exciting opportunity. For years, I've built my career in technology powered by Spectrum and have seen various companies and technologies come and go, witnessing both what has worked and what hasn't. Having now been with Nextnav for just over 100 days, I can easily say that this opportunity is truly unique. What ultimately attracted me to this role was the potential of the Nextnav portfolio. First and foremost, Nextnav is a growing company with an impressive set of assets and solutions, Specifically, PMT solutions that span both the private and public sectors and are powered by a valuable ecosystem. Positioned in the lower 900 megahertz band with excellent propagation characteristics, Nextnav's existing spectrum is ideally positioned to unleash opportunities to develop next-generation solutions. That said, I believe the value potential of this asset has long been underappreciated. Today, the need for PMT solutions powered by low-band spectrum with optimized use is a powerful opportunity.
Thank you Gary and good afternoon, everyone.
It is a pleasure to be on my first earnings call as the CEO of Max now.
Having the chance to take over the reins of the company is truly an exciting opportunity.
For years I built my career in technology powered by spectrum.
<unk> seen various companies and technologies come and go witnessing both what has worked and what hasn't.
Having now been with Dx now for just over 100 days I can easily say that this opportunity is truly unique.
What ultimately attracted me to this role was the potential the next portfolio.
First and foremost.
<unk> is a growing company with an impressive set of assets and solutions.
Specifically PNT solutions that span, both the private and public sectors.
Powered by a valuable spectrum asset.
Position due to the lower 900 megahertz band with excellent propagation characteristics next mapped existing spectrum is ideally positioned to unleash opportunities to develop next generation solutions.
I believe the value potential of this asset.
It has long been under appreciated.
Today, the need for P&C solution powered by low band spectrum with optimized juice is a powerful opportunity.
Mariam Sarand: It can address many of the problems we face in both the public and private sectors, including in areas like national security and public safety. As a result, I am confident that there is significant potential in Nextnav's ability to explore various options to enhance next-generation PNT technology through spectrum. This is why I'm excited by our recent acquisition of additional spectrum licenses covering 4 MHz of non-contiguous spectrum. Announced earlier this week, the licenses are in the same lower 900 megahertz band as our current spectrum and were acquired after a recent opportunity to buy them from the receiver. We moved quickly, and as we move forward to take advantage of our full spectrum portfolio, all of these licenses will be part of the mix. What has me even more excited about this opportunity is just how well it dovetails with my background.
It can address many of the problems we faced in both the public and private sectors, including in areas like National security and public safety.
As a result, I am confident that there is significant potential next not ability to explore various options to enhance next generation P&C technology to spectrum.
This is why I am excited by our recent acquisition of <unk>.
Additional spectrum licenses covering four megahertz of non contiguous spectrum.
And now earlier this week with licenses are in the same lower 900 megahertz band.
As our current spectrum and were acquired after Houston opportunity to buy them from the receiver.
We moved quickly and as we move forward to take advantage of our full spectrum portfolio. All of these licenses will be part of the mix.
What has me even more excited.
This opportunity is just how well it dovetails with my background.
Mariam Sarand: As Gary mentioned, I have devoted my career to Advancing and Commercializing Innovation and Technology. I spent several years working at DISH where I oversaw spectrum technology, standards development, and negotiation of agreements across government agencies and industry partnerships. I created spectrum BAM plans towards a 5G Open RAN cloud native architecture design, which is currently deployed at DISH. I also led technology and strategy efforts for taco cloud platforms, mobile and wired conversions, and satellite technologies at other companies. In short, this type of work is embedded in my DNA.
As Gary mentioned I have devoted my career.
See advancing in commercializing innovation and technology.
I spent several years working with dish, where I oversaw all spectrum technology standards development and negotiation of agreements across government agencies and industry partnerships.
Our credit spectrum band plans towards the five open when cloud native architectures with Brian.
Currently deployed at dish.
Also like technology and strategy efforts for telco cloud platforms mobile and wireless convergence.
Satellite technologies that other companies.
This type of work.
That is in my DNA.
Mariam Sarand: Moving forward, my priority is ensuring that the entire organization is laser focused on advancing our path forward. Specifically, we are committed to developing next-generation technology for PMTs that will take advantage of 5G. Our primary goal is single-digit accuracy everywhere. This means creating a 3D positioning solution that provides location that is highly accurate and is available indoors as well as outdoors and in urban corridors.
Moving forward.
The priority is on ensuring that the entire organization is laser focused on advancing our path forward.
Specifically, we are committed to developing next generation technology for <unk> that will take advantage of five G.
Our primary goal is single digit accuracy everywhere.
This means creating a threep positioning solutions that provides location that is highly accurate.
He's available any doors as well as the outdoors and in urban corridors. It also means wireless distribution of timing everywhere.
Mariam Sarand: It also means wireless distribution of timing everywhere. It's within this framework that we will be looking to advance next-gen PNT in a timely and efficient manner. As part of this process, I want to stress that we plan to take a fresh look at all components of the business, with an eye toward taking full advantage of our spectrum. To do this, I have assembled a top team combining in-house technical talent with consultant expertise in P&T and spectrum-based services to help advance our vision. This group nicely complements the existing Nextnav team of experts and will be invaluable to us in our management as we chart our path forward. As part of this effort, we will be looking at how best to leverage our spectrum, including the recently acquired licenses I referred to earlier.
Within this framework that we will be looking to advance nextgen P&C timely and efficient manner.
As part of this process I want to stress that we plan to take a fresh look at all components of the business.
With an eye toward taking full advantage of.
Our spectrum assets.
To do this.
We've assembled a top team combining in house technical talent with consulting expertise in PNG and spectrum based services to help advance our vision.
This group nicely complements the existing next now team of experts and will be invaluable to us and our management as we chart our path forward.
As part of this effort, we will be looking at how best to leverage our spectrum, including the recently acquired licenses I referred to earlier as a reminder, nextera truly own licenses covering a contiguous eight megahertz of valuable low band spectrum, covering $2 4 billion megahertz Pops.
Mariam Sarand: As a reminder, Nextnav currently owns licenses covering a contiguous 8 MHz of valuable low-band spectrum, covering 2.4 billion MHz POPs. With the addition of new licenses, Nextnav's full-spectrum portfolio will total 3.5 billion Mbps of low-band spectrum, an impressive portfolio of assets. In terms of next steps, we need the court to approve the transaction, and assuming that happens, we will promptly seek FCC approval. Until that time, our primary focus remains on developing next-generation technology for P&T that will take advantage of 5G. We expect all of Nextnav's licenses will be a part of the mix as we consider how best to take advantage of our faculty.
With the addition of new licenses next not full spectrum portfolio will total $3 5 billion megahertz Pops of low band spectrum.
And impressive portfolio of assets.
In terms of next steps, we need to court to approve the transaction and assuming that happens we will promptly seek FCC approval.
Until that time, our primary focus remains on developing the next generation technology for <unk> that will take advantage of <unk>.
We expect all of next snapped licenses will be a part of the mix as we consider how best to take advantage.
Of our spectrum.
Mariam Sarand: We have an exciting path ahead, and I look forward to providing additional updates as we progress over the coming months. Finally, before handing things over to Chris, I want to quickly provide an update on our PNC activity. Accurate PNT continues to be necessary for the functioning of critical infrastructure in civil, commercial, and military use.
We have an exciting path ahead, and I look forward to providing additional updates as we progress over the coming months.
Finally, before handing things over to Chris I want to quickly provide an update on our P&C activities.
Accurate PNT continues to be necessary for the functioning of critical infrastructure and civil commercial and military use all sectors that rely on accurate P&C data to provide their services.
Mariam Sarand: All sectors that rely on accurate PNT data to provide their service. More importantly, PNC is a national security issue, and resilience needs to be considered.
More importantly, PNC is a national security topic.
And resiliency needs to be considered.
Mariam Sarand: We are currently in discussions with several agencies on this exact topic. Specifically, we are planning to respond to a Department of Transportation RFQ that was released last month to test complementary P&T solutions in an operational environment, including testing against GPS disruptions. This follows the DOT's complementary PNC action plan that was issued this past fall.
We are currently in discussions with several agencies on this exact topic.
Specifically, we are planning to respond to a department of transportation RF Q that was released last month to test complementary PNT solutions in an operational environment, including testing against GPS disruptions.
This follows the Dot's complementary PNC action plan that was issued this past fall.
Mariam Sarand: As you can see, it's quite a busy and exciting time at Nextnav. We have an incredible path ahead, and I can't wait to share more with you over the coming months. I also want to make clear that, as CEO, I plan to be very engaged with our shareholders and the financial community. My goal is to ensure that all of you have a clear understanding of our pathways to growth and the milestones we need to achieve along the way. As you know, our company is engaged in numerous conversations with government officials as we lay the groundwork for our future, and there is a sensitive nature to many of these discussions.
As you can see it's quite a busy and exciting time at Max now we have an incredible path ahead, and I can't wait to share more with you over the coming months.
I also want to make clear that as CEO I plan to be very engaged with our shareholders and the financial community.
My goal is to ensure that all of you have a clear understanding of our pathways to growth and the milestones we need to achieve along the way.
As you know our company is engaged in numerous conversations with government officials as we laid the groundwork for our future.
And there is a sensitive nature to many of these discussions.
Mariam Sarand: As I am able, I look forward to sharing information and providing you with regular updates. Though this is a process that will take time, we are committed to seeing it through and hope all of you will join us on this exciting journey. With that, I will turn the call over to Chris to run through our financials.
As I am able I look forward to sharing information and providing you with regular updates.
So this is a process that will take time, we are committed to seeing it through and hope all of you will join us on this exciting journey.
With that I will turn the call over to Chris to run through our financials, Chris. Thank.
Christian D. Gates: Thank you, Marianne. Good afternoon, everyone. Let me begin with a review of the terms of the spectrum transaction. As noted in our press release on March 11th, we signed an asset purchase agreement to acquire additional lower 900 MHz spectrum licenses in our band for a total purchase price of up to $50 million. $2.5 million of the purchase price is to be paid in cash, due within 30 days of the court approving the transaction.
Thank you Mary and good afternoon, everyone.
Let me begin with a review of the terms of the spectrum transaction as noted in our press release on March 11th we signed an asset purchase agreement to acquire additional lower 900 megahertz spectrum licenses and our band for a total purchase price of up to $50 million.
$2 5 million purchase price to be paid in cash due within 30 days of the quarter proving the transaction. The remainder is expected to be paid for it with next day of common stock at the then current stock price based on the achievement of certain milestones, including appropriate regulatory approvals I would refer you to our 8-K filings for.
Christian D. Gates: The remainder is expected to be paid for with Nextnav common stock at the then-current stock price, based on the achievement of certain milestones, including appropriate regulatory approval. I'd refer you to our 8K filing for specific transaction details. I should also note that we structured this transaction consistent with our conscious efforts to manage the use of capital in our business. Recall that we executed a debt financing of senior secured notes last year that yielded gross proceeds of approximately $70 million, along with warrants with an aggregate strike price of $56 million.
The transaction details.
I should also note that we structured this transaction consistent with our conscious efforts to manage the use of capital in our business.
We executed a debt financing of senior secured notes last year that yielded gross proceeds of approximately $70 million.
Along with warrants with an aggregate strike price of $56 million.
Christian D. Gates: We were pleased by the positive market reception for this financing, which was a testament to the potential value to be unlocked in our assets and business. Now turning to our financials, fourth quarter revenue increased 50% to $1.2 million compared to $803,000 in the prior year period, primarily due to increased recurring services revenue in the current period from technology and service contracts with commercial customers. For full year 2023, revenue is $3.9 million, flat versus the prior period. Our revenue is driven by an increase in recurring service revenue from technology and service contracts to commercial customers, offset by a decline in integration revenue from the prior year period. Our operating expenses were $21.1 million in the quarter, up from $15.3 million in the same period last year, due primarily to an increase in equity-based compensation expense, a full period of Nextnav France operations, and a CEO transition.
We were pleased by the positive market reception to this financing, which was a testament to the potential value to be unlocked in our assets and business now.
Now turning to our financials fourth quarter revenue increased 50% to $1 2 million compared to 803000 in the prior year period.
Due to increased recurring services revenue in the current period from technology and service contracts with commercial customers.
For full year 2023 revenue was $3 9 million flat versus the prior period.
Our revenue was driven by an increase in recurring service revenue from technology and service contracts commercial customers offset by a decline in integration revenue from the prior year period.
Our operating expenses were $21 1 million in the quarter up from $15 3 million in the same period last year due primarily to an increase in equity based compensation expense a full period of <unk>, France operations in CEO transition costs.
Christian D. Gates: Excluding stock-based compensation and depreciation and amortization, operating expenses were $10.7 million compared to $8.4 million in the prior period. For the full year, operating expenses were $67.4 million, down from $69.5 million in the prior year, with a reduction driven by a decrease in SG&A partially offset by increases in depreciation and amortization as well as R&D expenses, primarily related to a full year of Nextnav France operations, excluding stock-based compensation and depreciation and amortization. Full-year operating expenses were $40.7 million in the current period and $39.3 million in the prior year. The net loss in the fourth quarter was $16.4 million, compared to a loss of $12.5 million in the prior year.
Excluding stock based compensation and depreciation and amortization operating expenses were $10 7 million compared to $8 4 million in the prior period.
For the full year operating expenses were $67 $4 million down from $69 5 million in the prior year.
With the reduction driven by a decrease in SG&A, partially offset by increases in depreciation and amortization as well as R&D expenses, primarily related to a full year of Mexico, France operations.
Excluding stock based compensation and depreciation and amortization full year operating expenses were $40 $7 million in the current period and $39 3 million in the prior year.
Net loss in the fourth quarter was $16 4 million compared to a loss of $12 5 million in the prior year. The primary drivers for the increase were net interest expense of $2 million higher stock based compensation expenses and higher payroll costs, partially offset by a gain from the change in the fair value of our warrants at $5 7 million compared to net interest income of four.
Christian D. Gates: The primary drivers for the increase were net interest expense of $2 million, higher stock-based compensation expenses, and higher payroll costs, partially offset by a gain from the change in the fair value of our warrants of $5.7 million, compared to net interest income of $456,000, and a gain from the change in the fair value of our warrant liability of $1.5 million in the prior year. For full year 2023, a net loss of $71.7 million is compared to a loss of $40.1 million in the prior year period. Here again, the primary drivers were net interest expense of $3.7 million and a loss associated with the change in fair value of our warrant liability of $4.1 million, compared to net interest income of $901,000 and a gain associated with the change in fair value of our warrant liability of $24.7 million in the prior year. Looking at our balance sheet, we closed out the year with $81.9 million in cash and cash equivalents and $4 million in short-term investments. The company ended the year with $48.4 million in debt, a net unamortized discount attributed to transaction costs and the issuance of warrants, with a gross value of $70 million.
<unk> hundred 56000, and a gain in the change of the fair value of our warrant liability of $1 5 million in the prior year.
For full year 2023, net loss of $71 7 million as compared to a loss of $40 1 million in the prior year period.
Here again, the primary drivers of our net interest expense of $3 7 million and a loss associated with the change in fair value of our warrant liability of $4 1 million compared to net interest income of 901.
Gain associated with the change in fair value of our warrant liability of $24 7 million in the prior year.
Looking at our balance sheet, we closed out the year with $81 9 million in cash and cash equivalents at $4 million and short term investments.
We ended the year with $48 4 million in debt net of unamortized discount attributed to transaction costs and the issuance of warrants the gross value of $70 million.
Operator: As a quick reminder, the warrants issued as part of our debt financing are exercisable for cash and become partially callable beginning in 2025. Whether called or exercised otherwise, these warrants may provide a source of additional liquidity, as they did in the third quarter of 2023. Thank you, and with that, I will turn things over to the operator to open the call to questions. Operator?
As a quick reminder, the warrants issued as part of our debt financing are exercisable for cash and become partially call, but if we get into 2025.
They are exercised otherwise these warrants may provide a source of additional liquidity as they did in the third quarter of 2023.
Thank you and with that I will turn things over to the operator to open the call for questions operator.
Griffin Boss: Thank you. As a reminder, if you would like to ask a question, please press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, again, press star one. Your first question comes from the line of Griffin Boss from B. Riley Securities. Please go ahead.
Thank you as a reminder, if you would like to ask a question. Please press star followed by the number one on your telephone keypad, if you'd like to withdraw your question Press Star. One. Your first question comes from the line of Griffin boss from B Riley Securities. Please go ahead.
Mariam Sarand: Hi, thanks for taking my question. And first off, welcome to the team, Miriam. Can you just give some color on your thoughts, specifically, just at a high level, the value you saw in these additional 900 megahertz spectrum licenses that Nextnav announced they were acquiring a couple days ago, and what that means for the company going forward, and just the overall value proposition of the company? Absolutely. So, um, As you know, the ABOT spectrum has been out there for some time, and we were focused on our existing licenses. One of the reasons I was so excited to join Nextnav was the potential of the technology portfolio and the interesting spectrum assets, right? This transaction gives us the opportunity to build on this portfolio.
Hi, Thanks for taking my question.
First off welcome to the team Maryann can you just give some color on your thoughts specifically just just high level. The value you saw in these additional 900 megahertz spectrum licenses that next <unk> announced they were acquiring a couple of days ago, and what that means for the company going forward and just the overall.
<unk> value.
Value proposition of the company.
Okay.
Yes, absolutely so.
As you know that the block spectrum has been out there for some time and we were focused on our existing licenses.
One of the reasons I was so excited to join <unk> was the potential of the technology portfolio and the interesting spectrum asset write this transaction gives us the opportunity to build on this portfolio.
Mariam Sarand: Specifically, Nextnav already has a valuable spectrum position in the lower 900 megahertz band. Following the close of this new agreement, Nextnav's full-spectrum portfolio, as I noted earlier, is going to be 3.5 billion MHz pops of low-band spectrum. And on top of that, the need for PNT that is powered by low-band spectrum is a great opportunity, and it can address many of the problems inherent across both the public and private sectors. Great. Thanks for thanks for that color.
Typically next now already has a valuable spectrum position in the lower 900 megahertz band.
Following the close of this new agreement next not full spectrum portfolio. As I noted earlier is going to be $3 5 billion megahertz pops of low band spectrum.
Layer on top of that the need for Pn T that is powered by low band spectrum, It's a great opportunity and it can address many of the problems inherent across both the public and private sectors.
Got it great. Thanks for thanks for that color and then maybe either for Gary or Mary I mean is there anything you can share regarding progress with testing and where you're at with the FCC process at this point.
Mariam Sarand: And then maybe either for Gary or Miriam, is there anything you can share regarding progress with testing and where you're at with the FCC process at this point? Yeah, I mean, let me take that and Gary, what did you want to add? First of all, with the testing, you know, we actually have the results of the limited testing that we did in the Bay Area were positive. Now that we have a larger spectrum portfolio to work with, there will be additional testing. And we will be working to include all the licenses in this process as we move forward, right? As a reminder, they're internal tests that we conduct as part of the optimization and development of our next generation systems.
Yes.
Let me take that and Gary you wanted to add but first of all with the testing.
Actually the results of the limited testing that we did in the Bay area were positive.
Now that we have a larger spectrum portfolio to work with there will be additional testing and we will be working to include all the licenses and this process as we move forward Brian as a reminder, they are internal tests that we conduct this part of the optimization and development of our next generation systems and I should note, we will not be published.
Mariam Sarand: And I should note, we will not be publishing that data unless it becomes a part of the FCC file. There is a process at the FCC, and we will work through that process diligently. Having just announced this transaction, we are working on a plan, but it would be premature for us to discuss our efforts at this juncture. Okay, great. Well, that's good news. I'm glad to hear that. And then just last one for me, if I could, Mary, obviously, you mentioned that you're going to be taking a fresh look at all components of the business regarding future opportunities. Does that make sense?
That data unless it becomes.
Part of the FCC filings.
There is a process at the FCC and we will work through that process diligently.
Having just announced this transaction we are working on a plan, but it would be premature for us to discuss our efforts at this juncture.
Okay, great well that's good news.
Glad to hear that and then just last one for me if I could.
Mary I mean, obviously, you mentioned youre going to be taking a fresh look at all components of the business regarding future opportunities that makes sense. The company in the past discussed certain agreement with a tier one global chip manufacturer for GPS Iot applications.
Mariam Sarand: The company in the past has discussed a certain agreement with a tier one global chip manufacturer for GPS IoT applications. I just wanted to get some more color on whether that opportunity is still progressing with anticipated revenue starting to ramp up in the back half of this year. Look, P&T continues to be one of our focuses, and advancing our next generation technology in P&T would be a focus. We're talking to multiple industry entities, we're talking to government agencies, and we are taking a fresh look at how we can advance focus our portfolio of spectrum as it powers this technology. So it's all in the mix with a fresh look.
Just wanted to get some more color on whether that opportunity is still progressing with.
Anticipated revenue starting to ramp up in the back half of this year.
Look PNT continues to be one of our focuses and advancing our next generation technology in PMT would be a focus we're talking to.
Multiple industry.
Entities were talking to the government agencies, and we are taking a fresh look at how we can advance focusing our portfolio of spectrum.
It powers this technology.
So.
It's all in the mix with a fresh look.
Griffin Boss: Okay, fair enough. Thanks for taking my questions. I appreciate it. Your next question comes from the line of Timothy Horan from Oppenheimer.
Okay fair enough. Thanks for taking my questions I appreciate it.
Your next question comes from the line of Timothy Horan from Oppenheimer. Please go ahead.
Timothy Kelly Horan: Please go ahead. Hey, thanks, guys, and thanks, Maryam. Can you talk a little bit more about the spectrum we just acquired, maybe the geographic coverage, and exactly is it contiguous to you guys, or is it in the same exact band? And are there other bands, you think, in this range that you could potentially, you know, acquire? And then... Well, yeah, that's a lot of questions.
Hey, Thanks, guys. Thanks Mary.
Could you talk a little bit more about the spectrum, we just acquired or maybe the geographic coverage and exactly as a contiguous to you guys or is it in the same exact band.
And are there other bands do you think in this range that you could potentially.
Acquire and then.
Well, yes, that's a lot of questions here.
Mariam Sarand: Okay, thanks for the question, Tim. Our current portfolio is 8 MHz of contiguous spectrum, and it covers 2.4 billion MHz POPs, and the A block is non-contiguous spectrum that brings our total portfolio up to 3.5 billion megahertz. So that's what the spectrum, and they're both located in the lower 900 megahertz.
Okay. Thanks for the question too so.
Our current portfolio is eight megahertz of contiguous spectrum and it covers two 4 billion megahertz Pops in.
In the block is non contiguous spectrum.
Brings our total portfolio.
Up to $3 5 billion megahertz Pops.
So that's what the spectrum and they're both located in the lower 900 megahertz.
Mariam Sarand: As far as other spectrum, right now, we're very laser focused on our current licenses, and once approved, and once we have discussions at the FCC with the future licenses that we just acquired, that's where our focus will be. But of course, we'll take a look at everything that's going out there as well. So is this 4 MHz, is it covering like 200 or 250 million people, is that what you're saying, and it's not in the same exact spectrum band as yours, it's adjacent? It isn't the same.
As far as other spectrum right now, we're very laser focused on our current licenses and.
Once approved and once we have discussions with the FCC with.
With the future licenses that we just acquired and Thats, where our focus will be but of course, we will take a look at everything that's going out there as well.
So sorry.
So are they cover in this form megahertz is it covering like 200 or 250 million Pops is that what you're saying and it's not on the same exact spectrum band is yours, it's adjacent.
It isn't the same so the range is between 902 to 928 megahertz.
Mariam Sarand: So the range is between 902 to 928 MHz. The A Block falls on the lower portion of that spectrum, and our current eight migrant licenses fall in the upper portion of that same spectrum. So they're all on the same spectrum.
<unk> falls on the lower portion of the spectrum.
Our current eight megahertz licenses fall in the upper portion of that same spectrum. So theyre all in the same spectrum yet.
Gary M. Parsons: Got it. Yeah. And the geographic or the pop coverage that they have? So the POP coverage for the 8 MHz is 2.4 billion MHz POPs, and then the 8-block would give us an additional 1.1 that brings us up to 3.5 billion MHz POPs. Hey, and Tim, this is Gary. So, you know, as you appropriately noted, if you do the math on that, yeah, their actual top coverage is something like $270 million, whereas it's like $300 million. So yeah, that's how you get to the number. And does it become a lot more valuable by combining their spectrum with yours? Is it, you know, an exponential increase instead of just, you know, 1 plus 1 being 2, 1 plus 1 being 5, or, you know, any color around that? What you can do with it would be great.
Got it.
Geographic or the pop coverage that they have.
So the pop coverage for the eight megahertz of $2 4 billion megahertz Pops and then the a block would give us an additional $1 one that brings us up to three and a half billion megahertz Pops.
Hey, Tim this is Gary so.
As you appropriately noted if you do the math on that yes, they're actual pop coverage is something like $270 million.
There's like $3 million.
So yes, that's how you get to the numbers.
And does it become a lot more valuable by combining their spectrum would your spectrum is it an exponential increase instead of just one plus one being two one plus one being five or any color around that what you can do with it would be great.
Mariam Sarand: Look, we can share more, but we have to wait for our FCC process at this point. I can tell you that we need to work with the FCC for approval, and talking about how this would look in the future is a little bit premature until we go through that process, but it is an exciting combination of assets and technology that we're talking about over here. But we are going to be diligent in the FCC process, and we actually don't want to prematurely be discussing what that looks like. And so do you have a rough idea when the transaction might close? And are there any collars on your stock, you know, at all for paying the remainder of the?
Look we can share more when we have to wait for our FCC process. At this point I can tell you that we need to work with the with the FCC for the approval and talking about how this would look in the future a little bit premature until we go through that process, but it is.
Exciting combination of assets and technology that we're talking about over here.
So, but we will we are going to be diligent in the FCC process and we actually don't want to prematurely be discussing what that looks like.
And so do you have a rough idea one the transaction might close.
And are there any colors on your stock.
At all for.
For paying the remainder of the.
Mariam Sarand: For 50 million of the company, So, in terms of timing, the court must approve the transaction, and assuming that happens, we will also need FCC approval. Okay, but right now, our primary focus is on developing the next generation technology while that's going on that will take advantage of 5G. Great. Thanks a lot, guys. And we have no further questions in our queue at this time. I will now turn the call back over to Miriam Soran for closing remarks. Thank you, everyone, for joining us today. I want to reiterate how excited I am about the technology and the opportunity I see at Nextnav as we move forward. We'll have more to share on our progress, and I look forward to speaking with all of you again on our first quarter earnings call. Thank you. This concludes today's conference call. Thank you for your participation, and you may now disconnect. Please wait. The conference will begin shortly. Thank you for watching.
For the $50 million of company.
So in terms of timing.
Court must approve the transaction and assuming that happens we will also need to FCC approval.
But right now our primary focus is on developing the next generation technology, while that's going on that will take advantage of five G.
Great. Thanks, a lot guys.
Sure.
And we have no further questions at this time I will now turn the call back over to Miriam Zoran for closing remarks.
Thank you everyone for joining us today I want to reiterate how excited I am about the technology and the opportunity I see at next step as we advance forward, we'll have more to share on our progress and I look forward to speaking with all of you again on our first quarter earnings call.
Thank you.
This concludes today's conference call. Thank you for your participation and you may now disconnect.
Please wait the conference will begin shortly.
Sure.
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